Are We Losing Ground?

From politicos on Capitol Hill to the halls of academia, the specter of stagnating living standards is almost taken for granted. But are most Americans really no better off, or even worse off, than they were a generation ago?

The view of stagnating living standards stems from a set of macroeconomic indexes that imperfectly serve as a proxy for how well people are doing. A gap between individual experiences and the numbers has always existed, but as our economy has evolved from an industrial base to a service base and, ultimately, to an information base, the perception of the gap has widened. Moreover, as we transition from an easy-to measure “terrestrial” economy to an incorporeal “cyber” economy—with its abundance of cheap, free, and time-saving services—the disconnect between the numbers and our living standards will grow.